Asian Stocks Set to Rise; Treasuries, Dollar Fell: Markets Wrap

Asian Stocks Set to Rise; Treasuries, Dollar Fell: Markets Wrap
Andreea Papuc
·3 min read

(Bloomberg) -- Asian stocks looked set to rise Tuesday after U.S. equities extended a winning streak on optimism that the economic recovery can weather inflation risks. The dollar and Treasuries declined.

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Futures for Japan and Hong Kong climbed. Australia fluctuated. U.S. futures were steady in early Asian trading. The S&P 500 edged higher for an eighth session, the longest winning streak since 2017. A drop in Tesla Inc. weighed on the Nasdaq 100 after Elon Musk’s Twitter followers in a poll he set up voted in favor of the billionaire selling 10% of his stake in the firm.

Treasury yields advanced amid a weak three-year auction. Meanwhile, the yield on 30-year Treasury inflation-protected securities slid to a record low, a sign of ongoing concerns about price pressures shadowing the global economy.

In cryptocurrencies, Bitcoin jumped past $67,000 for the first time to set a new all-time high.

Coronavirus treatments, easing travel curbs and the passage of a $550 billion U.S. infrastructure bill have boosted sentiment. Key central banks are also persisting with still-loose monetary policy, in part on expectations that inflationary pressures caused by creaking supply chains and energy prices will prove temporary.

“Central banks were less hawkish than the markets were expecting them to be last week so we are seeing real yields going further down into negative territory,” Lale Akoner, BNY Mellon Investment Management senior market strategist, said on Bloomberg Television. The reflation trade is coming back again and the market is pricing in “a mid-cycle environment,” she said.

Questions continue to swirl about the sustainability of the stock market rally. The Federal Reserve in its twice-yearly Financial Stability Report said “asset prices remain vulnerable to significant declines should investor risk sentiment deteriorate, progress on containing the virus disappoint, or the economic recovery stall.”

Investors are awaiting the U.S. inflation report Wednesday. Gains in payrolls last week showed a jump in average hourly earnings.

The troubles in China’s property sector remain in focus. Two holders of dollar notes sold by a unit of China Evergrande Group are yet to receive payment for coupons that were officially due Saturday. Separately, U.S.-listed Chinese education stocks gained on a report that Beijing plans to issue licenses to allow companies to offer after-school tutoring.

Elsewhere, crude pushed higher, but the increase was tempered by the possibility of U.S. steps to ease oil and gas prices. Gold was around the highest in two months.

What to watch this week:

  • China’s Communist Party’s decision-making Central Committee meets through Thursday

  • Federal Reserve Bank of San Francisco President Mary Daly speaks Tuesday

  • China aggregate financing, money supply, new yuan loans Tuesday

  • China PPI Wednesday

  • U.S. wholesale inventories, CPI, initial jobless claims Wednesday

  • U.S. bond marked is closed in observance of Veterans Day Thursday

  • China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday

For more market analysis, read our MLIV blog.

Stocks

  • S&P 500 futures fell 0.1% as of 8:26 a.m. in Tokyo. The S&P 500 rose 0.1%

  • Nasdaq 100 futures fell 0.1%. The Nasdaq 100 fell 0.1%

  • Nikkei 225 futures rose 0.5%

  • Australia’s S&P/ASX 200 Index added 0.1%

  • Hang Seng Index futures gained 0.6%

Currencies

  • The Japanese yen was at 113.23 per dollar

  • The offshore yuan traded at 6.3883 per dollar

  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro was at $1.1587

Bonds

  • The yield on 10-year Treasuries advanced four basis points to 1.49%

  • Australia’s 10-year bond yield rose four basis points to 1.79%

Commodities

  • West Texas Intermediate crude rose 0.3% to $82.13 a barrel

  • Gold was at $1,825.05 an ounce

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